Mike Lindenberg

Mike Lindenberg of Deutsche Bank asked about United's upcoming decision on the future shape and size of its wide-body fleet, specifically how the historical pain points and costs associated with introducing additional aircraft types have evolved or if they remain prohibitively expensive.

Answer

EVP and CFO Mike Leskinen acknowledged the complexity costs of additional aircraft types, stating this hasn't changed for United. He explained that the decision involves weighing these costs against different aircraft capabilities (range, gauge), price, and expected maintenance costs to optimize long-term profits.

Mike Lindenberg asked about the impact of the current government shutdown, recalling the 2018/2019 shutdown and its financial effect on Delta. He also inquired about Delta's focus on Boston, a non-hub city, and what has changed to make such flying profitable, historically being lower margin.

Answer

President Glen Hauenstein recalled the previous shutdown's impact was about $1 million a day, but the current impact is less than that, partly because DCA travel was already down. He explained that Delta's strategy for focused cities like Boston (and Austin) is driven by customer relevance, which enables the acquisition of SkyMiles members and co-brand cards, creating a profitable ecosystem. These focused cities have proven quite profitable, sometimes exceeding hubs.

Mike Lindenberg asked about the financial impact of past government shutdowns on Delta, specifically recalling the 2018-2019 period and how it started to affect the company. He also questioned what has changed to make non-hub flying in focused cities like Boston profitable for Delta.

Answer

President Glen Hauenstein recalled that the previous government shutdown cost Delta about $1 million a day, which is now less than $1 million a day due to factors like reduced DCA travel. He explained that focused cities are profitable because they enhance Delta's relevance, allowing the acquisition of SkyMiles members and co-brand cardholders, which are crucial for the loyalty ecosystem, sometimes exceeding hub profitability.